DCIT, Circle - 8(2), Kolkata , Kolkata V. M/s. Unisys Software And Holding Industries Ltd., , Kolkata

ITA 658/KOL/2018

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 8000 (ITAT-KOLKATA)
• Duration Of Justice: 8 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-01-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2013-2014
• Appeal Filed On: 10-04-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Earning of tax free income
• Section: 143(3); 14A; 2

Judgement Text

ITA NO. 658/KOL/2018 A.Y. 2013-2 014 M/S. UNISYS SOF TWARE AND HOLDING INDUSTRIES LIMITED 1 IN THE INCOME TAX APPELLATE TRIBUNAL, KOLKATA D BENCH, KOLKATA BEFORE SHRI P.M. JAGTAP, VICE-PRESIDENT (KZ) AND SHRI S.S. VISWANETHRA RAVI, JUDICIAL MEMBER I.T.A. NO. 658/KOL/2018 ASSESSMENT YEAR: 2013-2014 DEPUTY COMMISSIONER OF INCOME TAX,................. ............................APPELLANT CIRCLE-8(2), KOLKATA, AAYAKAR BHAWAN, P-7, CHOWRINGHEE SQUARE, KOLKATA-700 069 -VS.- M/S. UNISYS SOFTWARE AND HOLDING INDUSTRIES LIMITED ,...............RESPONDENT 75, PARK STREET, BASEMENT, KOLKATA-700 016 [PAN: AABCC 1191 Q] APPEARANCES BY: SHRI SANKAR HALDER, ADDL. CIT(D.R) , FOR THE APPELLANT N O N E, FOR THE RESPONDENT DATE OF CONCLUDING THE HEARING : JANUARY 01, 2019 DATE OF PRONOUNCING THE ORDER : JANUARY 01, 2019 O R D E R PER SHRI P.M. JAGTAP, VICE-PRESIDENT (KZ):- THIS APPEAL IS PREFERRED BY THE REVENUE AGAINST TH E ORDER OF LD. COMMISSIONER OF INCOME TAX (APPEALS)-3, KOLKATA DAT ED 12.03.2018 AND THE SOLITARY GROUND RAISED THEREIN BY THE REVENUE R EADS AS UNDER:- THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE AN D IN LAW, THE LD. CIT(A) ERRED IN DELETED THE DISALLOWAN CE U/S 14A OF THE I.T. ACT, 1961 TO RS.70,70,394/- WHEREAS THE AO HAS MADE THE DISALLOWANCE AS PER SECTION 14A REA D WITH RULE 8D OF INCOME TAX ACT & RULES. 2. THE ASSESSEE IN THE PRESENT CASE IS A COMPANY, W HICH IS ENGAGED IN THE BUSINESS OF MAKING INVESTMENT IN SHARES AND SEC URITIES, GIVING LOANS AND ADVANCES AND DEALING IN SOFTWARE & HARDWARE. TH E RETURN OF INCOME FOR THE YEAR UNDER CONSIDERATION WAS FILED BY IT ON 10.09.2013 DECLARING TOTAL INCOME OF RS.88,46,060/-. IN THE ASSESSMENT C OMPLETED UNDER ITA NO. 658/KOL/2018 A.Y. 2013-2 014 M/S. UNISYS SOF TWARE AND HOLDING INDUSTRIES LIMITED 2 SECTION 143(3) VIDE AN ORDER DATED 31.03.2016, THE TOTAL INCOME OF THE ASSESSEE WAS DETERMINED BY THE ASSESSING OFFICER AT RS.1,59,16,449/- AFTER MAKING AN ADDITION OF RS.70,70,394/- ON ACCOU NT OF DISALLOWANCE UNDER SECTION 14A READ WITH RULE 8D OF THE INCOME T AX RULES, 1962. 3. AGAINST THE ORDER PASSED BY THE ASSESSING OFFICE R UNDER SECTION 143(3), AN APPEAL WAS PREFERRED BY THE ASSESSEE BEF ORE THE LD. CIT(APPEALS) AND AFTER CONSIDERING THE SUBMISSIONS MADE BY THE ASSESSEE AS WELL AS MATERIAL AVAILABLE ON RECORD, THE LD. CI T(APPEALS) DELETED THE DISALLOWANCE MADE BY THE ASSESSING OFFICER UNDER SE CTION 14A READ WITH RULE 8D FOR THE FOLLOWING REASONS GIVEN IN PARAGRAP H NO. 3 OF HIS IMPUGNED ORDER:- 3. THE MAIN GROUND OF THE APPEAL IS REGARDING THE DISALLOWANCE MADE BY THE ASSESSING OFFICER OF RS.70,70,394/- U/S 14A. THE AUTHORIZED REPRESENTATI VE OF THE APPELLANT IN HIS WRITTEN SUBMISSIONS HAS ARG UED THAT NO EXEMPTED INCOME HAS BEEN EARNED BY THE APPELLANT DURING THE PREVIOUS YEAR AND THEREFORE NO DISALLOWANCE U/S 14A SHOULD BE MADE. THE AUTHORIZED REPRESENTATIVE OF THE APPELLANT HAS RELIED ON THE DECISION OF HONBLE ALLAHABAD HIGH COURT IN THE CAS E OF SHIVAM MOTORS PVT. LTD. IN ITA 88 OF 2014, VIDE ORD ER DATED 05.05.2014 FOR THE PROPOSITION THAT DISALLOWA NCE U/S.14A SHOULD NOT BE MADE IF NO EXEMPTED INCOME HA S BEEN EARNED. MOREOVER, THE HONBLE DELHI HIGH COURT IN THE CASE OF CHEMINVEST LIMITED HAS ALSO HELD THAT N O DISALLOWANCE U/S. 14A CAN BE MADE IF NO EXEMPTED INCOME HAS BEEN EARNED. RESPECTFULLY FOLLOWING THE ABOVE DECISION, THE ADDITION MADE BY THE ASSESSING OFFICER IS HEREBY DELETED. AGGRIEVED BY THE ORDER OF THE LD. CIT(APPEALS), THE REVENUE HAS PREFERRED THIS APPEAL BEFORE THE TRIBUNAL. 4. AT THE TIME OF HEARING FIXED THIS CASE TODAY, NO NE HAS APPEARED ON BEHALF OF THE ASSESSEE. THE LD. D.R, HOWEVER, HAS F AIRLY AND FRANKLY CONCEDED THAT THE SOLITARY ISSUE INVOLVED IN THIS A PPEAL OF THE REVENUE RELATING TO DISALLOWANCE UNDER SECTION 14A IS SQUAR ELY COVERED, INTER ALIA, BY THE DECISION OF THE HONBLE DELHI HIGH COURT IN THE CASE OF CHEMINVEST ITA NO. 658/KOL/2018 A.Y. 2013-2 014 M/S. UNISYS SOF TWARE AND HOLDING INDUSTRIES LIMITED 3 LIMITED (78 ITR 033), WHEREIN IT WAS HELD THAT IF T HERE IS NO EXEMPT INCOME ACTUALLY EARNED BY THE ASSESESE DURING THE R ELEVANT YEAR, NO DISALLOWANCE UNDER SECTION 14A ON ACCOUNT OF EXPENS ES INCURRED IN RELATION TO SUCH EXEMPT INCOME CAN BE MADE UNDER SE CTION 14A. RESPECTFULLY FOLLOWING THE SAID DECISION OF HONBLE DELHI HIGH COURT IN THE CASE OF CHEMINVEST LIMITED (SUPRA) AS WELL AS T HE DECISION OF THE HONBLE CALCUTTA HIGH COURT IN THE CASE OF CIT VS. - REI AGRO LIMITED IN G.A. NO. 3581 OF 2013 DATED 09.04.2014 (ITAT NO. 22 0 OF 2013), WE UPHOLD THE IMPUGNED ORDER OF THE LD. CIT(APPEALS) D ELETING THE DISALLOWANCE MADE BY THE ASSESSING OFFICER UNDER SE CTION 14A AND DISMISS THIS APPEAL OF THE REVENUE. 5. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISM ISSED. ORDER PRONOUNCED IN THE OPEN COURT ON JANUARY 01, 2019. SD/- SD/- (S.S. VISWANETHRA RAVI) (P.M. JAGTAP) JUDICIAL MEMBER VICE -PRESIDENT (KZ) KOLKATA, THE 1 ST DAY OF JANUARY, 2019 COPIES TO : (1) DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE-8(2), KOLKATA, AAYAKAR BHAWAN, P-7, CHOWRINGHEE SQUARE, KOLKATA-700 069 (2) M/S. UNISYS SOFTWARE AND HOLDING INDUSTRIES L IMITED, 75, PARK STREET, BASEMENT, KOLKATA-700 016 (3) COMMISSIONER OF INCOME TAX (APPEALS)-3, KOLKAT A, (4) COMMISSIONER OF INCOME TAX- , (5) THE DEPARTMENTAL REPRESENTATIVE (6) GUARD FILE BY ORDER ASSISTANT REGISTRAR, INCOME TAX APPELLATE TRIBUNAL, KOLKATA BENCHES, KOLKATA LAHA/SR. P.S.